The latest report by the PricewaterhouseCoopers (PwC), has estimated that migrant remittances to Nigeria could grow to $25.5 billion, $29.8billion, and $34.8billion in 2019, 2021, and 2023 respectively.
In its White Paper Series cited by The Guardian yesterday, titled: “Strength from Abroad: The Economic Power of Nigeria’s Diaspora,” PwC expects total remittance flows into the country to grow by almost double in size from $18.37 billion in 2009 to $34.89 billion in 2023.
The World Bank had estimated that global remittances grew by 10 per cent to $689 billion (2017: $633 billion) in 2018, with developing countries receiving 77 per cent or $528 billion of the total inflows. India, China, Mexico, the Philippines and Egypt are among the largest remittance recipients globally, collectively accounting for approximately 36 per cent of total inflows.
But officially-recorded remittances are much lower than the actual remittances that take place through official and unofficial channels. Remittances through informal channels could add at least 50 per cent to the globally recorded flows.
The report revealed that sub-Sahara Africa (SSA), received a small share of the global remittances in 2018, with Nigeria accounting for over a third of regional inflows. Despite representing a small percentage of global flows, official remittances to SSA grew by 10 per cent to $46 billion in 2018.
The World Bank also projects remittances to the region will grow by 4.2 per cent in 2019, due to a moderation in global growth.
According to the International Monetary Fund (IMF), remittances sent to SSA through informal channels, at 45 to 65 per cent of formal flows, are significantly higher than in other regions. Overall, remittance flows are anticipated to keep expanding as a result of two factors: projected strong regional economic growth in 2019 and large intra-regional migration flows from the SSA region.
PwC noted that it is imperative that countries in the region, especially Nigeria, take advantage of this trend in the course of strategic economic decision-making.
According to the report for four consecutive years, official remittances have exceeded Nigeria’s oil revenues. Since many transactions are unrecorded or take place through informal channels, the actual amount of remittance flows into the country is arguably higher.
Commenting on the White Paper Series, Partner and Chief Economist, PwC Limited, Dr Andrew S. Nevin, said the report is an analysis that shows the critical importance of the Diaspora to Nigeria’s economy.
Nevin said the recently-established, Nigerians in Diaspora Commission (NiDCOM), led by Abike Dabiri-Erewa, indicates that the Federal Government recognises the strategic importance of the Nigerian Diaspora. The key next steps for the newly established Commission are to formulate and execute strategies to maximise the benefits of Nigeria’s Diaspora.
He said: “We are very keen to see State Governments start to engage the Diaspora. The primary benefits of remittances to recipient households is the improvement in their general welfare, and studies show that 70% of remittances are used for consumption purposes, while 30 per cent of remittance funds go to investment-related uses. So it is important that Nigeria has a Diaspora strategy both at the national and state level.”
Similarly, the report also stressed the need for the creation of platforms that will increase the accessibility of crucial information for Nigerians in the Diaspora, encourage and create pooled investment vehicles.
It also revealed that early-stage businesses with smaller financing needs presents a great opportunity for those in the Diaspora to invest through angel networks.